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Can You Negotiate Price On New Build Homes?

March 28, 2019
Dining room in Eton plan in Chappelle Gardens by Brookfield Residential in Edmonton, Alberta

When you’re planning to build a new home, can you negotiate the price with the new home builder? You can, according to Jessica McNabb, Area Manager with Brookfield Residential.

In this article, Jessica discusses tips for negotiating the price on new construction homes, and whether you can negotiate home upgrades and the lot on which a home is built.

Can you negotiate the price of a new construction home?

Negotiating the final price you’ll pay for a resale home is up to the home’s seller. Similarly, the final price of a new construction home is determined by the builder, who is the seller, Jessica says.“

There's nothing wrong with submitting an offer on a home,” she says. For a new construction home, you’ll meet with a builder representative who will present a list of available options you could include in the home. You’ll also be presented with the inclusions for the new construction home. Then, you can determine the price you are willing to pay for the new home, she explains.

“The builder will give you their price based on the lot premiums, the land price and the home itself,” she says. “From there, if people are planning to submit an offer, usually we would recommend that they had a comparable home that sold in the area, so those go hand in hand.”

What are “comparables?

”Comparables, sometimes called “comps,” are helpful to determine the value of a home in comparison to like or nearly-like homes sold in the same area or a similar one.

You can do your own comparable research or “If you have a realtor working with you, they'll submit the offer on your behalf based on a comparable [home] in the area,” Jessica says.

Can you negotiate upgrades on new construction homes?

It doesn’t hurt to ask the builder if they’ll consider lowering the cost of upgrades you’re considering for a new build home, Jessica says. However, after you’ve selected all of the upgrades you want toinclude, the builder will provide you with a total home price.

“It won't necessarily be the upgrade cost that you negotiate upon, but just the home price itself,” she says.

Can you negotiate upgrades on the lot?

Some people do negotiate the price of the lot on which the home is to be built, says Jessica. “There are some builders that could just sell you the lot, so you can bid on the price of that lot,” she says. With our builders at Brookfield Residential, it'll be the home and the lot that are sold together, so you'd be submitting your offer based on the price of that home and the lot together.”

Are corner lots more expensive?

Corner lots are typically more expensive than regular lots. “With a corner lot, you've got extra side treatments. You've got extra windows. The lot's typically a little bit wider, too. So there's more land value to it. That’s why corner lots typically do sell at a higher price.’

Are zero-lot line homes more expensive?

A zero-lot-line home — a property where the home meets or is very close to the lot boundary — typically costs somewhat less, Jessica says. “A zero-lot-line is where you've got a piece of land, and you've got several homes sitting on that same piece of land,” she says.

“We build the home on the actual lot line itself on one side, so you've got one side yard, and the other side of your home is just sitting on the lot line itself, so essentially, you've got half of a side yard, so it will be a little bit cheaper.”

Should you schedule a home inspection on a new construction home?

“It doesn't hurt to have a home inspection for resale and new construction homes,” says Jessica. “For resale homes, it’s always recommended to have an inspection done.”

“With a new construction home, you wouldn't necessarily need to, because it does fall under a warranty. The home has to go through six points of inspection for the city to pass it in the inspection. So you don't necessarily need to have a home inspection, but some people just feel more comfortable with it.” The warranty and inspection process might vary from region to region, as Brookfield Residential builds throughout North America.

If you have any questions about new build homes or purchasing a new build home, connect with our team to speak with a new build home expert. We also encourage you to check the Brookfield Residential blog for more design and project advice, homebuying insights, and mortgage tips like how to choose a home builder or our guide to the mortgage underwriting process.